Look Inward, CEO : Today, a Company Needs More Than a Mission; It Needs Some Vision, too

It was one of those off-the-cuff remarks that gained instant notoriety.

“The last thing IBM needs right now is a vision,” Louis V. Gerstner Jr. snapped at a reporter in mid-1993 after announcing $8.9 billion in cutbacks.

Gerstner, who had only recently taken over the chief executive’s job at IBM, might have been correct in stressing that the giant computer company had to concentrate on quickly lowering costs and honing its market focus to avoid being overtaken by more fleet-footed rivals.

But management experts couldn’t wait to pounce on what many perceived to be evidence of Gerstner’s inability to muster and articulate a vision for the beleaguered company. Two years later, despite major improvements in IBM’s fortunes, the matter continues to dog him.

The hubbub over Gerstner’s comment--along with years of corporate retrenchment and ever-evolving markets--also seems to have helped spur a great deal of soul searching at companies small and large. It’s not enough these days to have a mere “mission statement,” which has become commonplace. A company needs to have vision, too.

In their 1993 book “Reengineering the Corporation,” Michael Hammer and James Champy described a vision statement--by whatever name--as “the way a company’s management communicates a sense of the kind of organization the company needs to become.”

A vision statement should set an unattainable goal while giving insight into a corporation’s values and serving as an “inspirational touchstone,” said Greg Steltenpohl, co-founder and co-CEO of Odwalla, a fast-growing maker of fresh juices based in Half Moon Bay, Calif.

“A vision statement is like the sun,” he said. “You can’t ever get there, but it’s an attractive force that stimulates the growth of many things.”

At Odwalla (the O is long), the corporate vision statement takes the form of a poem--written, spokeswoman Sydney Fisher explained, with input from “all Odwallians” back when the company stood at just 120 employees, instead of the current 550:

Odwalla

A breath of fresh.

Intoxicating rhythm,

Living flavor.

Soil to soul,

People to planet,

Nourishing the body whole.

The verse is intended to impart a variety of notions: freshness and vitality, the importance of the environment, the value of nourishment. Not all employees fully embrace it, but the company must be doing something right.

For the year ended Aug. 31, sales of such beverages as Mo’Beta and Menage a Tropique nearly doubled, to $35.9 million, and net income jumped to $997,000 from $301,000 the year before.

To ensure that Odwalla practices what its vision poem preaches, the company recently hired its (and possibly the world’s) first vice president of vision access.

Susan Walters’ role is to look for ways that the company can be a good corporate citizen. Among other programs, Odwalla has aided farming families in the Central Valley, the source of 70% of its produce, and donated proceeds from the sale of its Femme Vitale beverage to fund scholarships for women studying health and nutrition.

Asked whether executives at IBM or General Motors might find the idea of a vision poem and vision access a bunch of hooey, Steltenpohl retorted: “What’s their rate of growth?”

When told of Odwalla’s new vision-access job, IBM spokesman Rob Wilson scoffed: “We have a head of strategy. We don’t have anyone with ‘vision’ in the title, which we would view as highly sophomoric.”

The notion of fostering a corporate vision is hardly new. The best-performing companies in America have long been guided by visionary leaders who took a long view. Among pioneers with formal statements are Hewlett-Packard, whose “HP Way” has been a guiding force for decades, and Johnson & Johnson, whose 1943 “Our Credo” helped steer the company to a masterful handling of the 1982 Tylenol crisis.

But vision statements have entered the mainstream--and the process of coaching companies in search of a formal vision has proven to be a boon for many a management consultancy.

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Who had the first vision statement?

“Probably Moses,” deadpanned James C. Collins, co-author of “Built to Last,” a 1994 book that explores the habits of visionary companies.

Vision statements are fine as far as they go, Collins noted, but the real key lies in what he calls “the alignment mechanisms”--deeply ingrained processes and values that help a company translate aspiration into reality.

The United States, Collins figures, has two vision statements: the Declaration of Independence and the Gettysburg Address. The Constitutional Convention and the abolition of slavery--and more recently the civil rights movement--were the steps (or mechanisms, in Collins’ parlance) that helped give life to those visions.

As for companies’ current penchant for hiring consultants to help them pen vision statements and then hoisting acrylic versions of them onto office walls, Collins said: “We’re putting a new term on something that effective organizations have been doing for a long time.”

Unless a company has a deep conviction to adhere to its principles, he said, “it’s actually destructive to write a vision statement. . . . You get a tremendous amount of well-deserved cynicism [in the work force].”

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All this might beg the question: What’s the difference between mission and vision, anyway? It’s a fine line, most management experts agree.

“I think of missions as more timeless, . . . a reason for being,” said Glenn Mangurian, senior vice president of CFC Index, a Cambridge, Mass., consulting firm. “A vision is something you’re aspiring to become.”

It’s almost impossible to weigh the effect of a company’s vision on the bottom line, but, if a statement successfully galvanizes the troops, economic improvement can result.

Simply vowing to be the best in a particular industry is too simplistic. A vision statement should “raise people’s minds and take them to a new place,” said Paul V. Croke, a principal in the Cambridge office of Gemini Consulting. “The objective is to get into their heart, mind and gut where the company is going.”

On that score, he would give average marks to the 20-year-old vision that Bill Gates and Paul Allen developed for their little software company, Microsoft: A computer on every desk and in every home. That strikes Croke as more of a mission statement, because it doesn’t reveal anything about the company’s values.

Which goes to show that even a visionary like Microsoft Chairman Gates finds it tough to nail down the vision thing. After all, when IBM’s Gerstner was being skewered for his vision comment, Gates rose to his defense by saying: “Being a visionary is trivial. Being a CEO is hard.”

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The ‘Vision Thing’

* Microsoft Corp., software

A computer on every desk and in every home.

* General Electric Co., diversified manufacturer and entertainment company

Boundaryless ... in all our behavior.

Speed ... in everything we do.

Stretch ... in every target we set.

* Just Desserts Inc., fine baked goods

To be recognized as one of the finest bakers in the world.

To be recognized as a model workplace.

To maintain a healthy level of profitability.

We will reach our vision by bringing delights to our customers and showing the world a better way.

* Pacific Telesis Group, communications

To enrich people’s lives through communications and electronic access to services, information, education and entertainment.

* Merix Corp., electronic links

Shape the future of electronic interconnect technology and business by creating extraordinary value and opportunity for our customers, investors, employees and suppliers/partners.

* Delta Air Lines, airline

Worldwide airline of choice.

Sources: Companies; “Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark,” by Patricia Jones and Larry Kahaner